S. Korea rumor crackdown jolts social media users

South Korea’s president is cracking down on rumors in cyberspace in a campaign that threatens the popularity of Kakao Talk, the leading social media service in a country with ambitions to become a global technology leader.

Prosecutors announced the crackdown two weeks ago after President Park Geun-hye complained about insults directed at her and said false rumors “divided the society.”

That rattled users of Kakao Talk, a smartphone-based messaging app used by 35 million of South Korea’s 50 million people. It prompted a surge of interest in a previously little-known German competitor, Telegram.

Rankey.com, a research firm, said an estimated 610,000 South Korean smartphone users visited Telegram on Wednesday, a 40-fold increase over Sept. 14, before the crackdown was announced. The company said its estimate was based on a randomly selected group of 60,000 people it follows regularly.

On Friday, Telegram was the most downloaded free app in Apple’s App Store in South Korea. On Google Inc.’s store, Telegram was the No. 2 downloaded free communications app, behind only Kakao Talk.

South Korean users left reviews on Telegram saying they left Kakao Talk to seek “asylum.” They asked Telegram to add a Korean language service.

The uproar threatens to slow adoption of social media or send South Korean users to foreign services, undercutting government ambitions to build a high-tech “creative economy.”

“It will definitely limit the number of new signups, as users opt for services which are not subject to monitoring,” said Jon Bradford, a managing director at startup accelerator TechStars in London. “Any policies that the Korean authorities only impose upon local businesses will damage their competitiveness both at home and abroad.”

South Korea is one of the most wired societies, with 85 percent of its people online and 40 million smartphones. The government has promised to step up financial support for tech startups.

Kakao Talk’s dilemma echoes criticism of U.S. technology companies following disclosures of widespread government surveillance. Internet and other companies have struggled to reassure users while saying they are legally obligated to cooperate with authorities.

This week, China’s telephone regulator said it approved Apple Inc.’s new iPhone 6 for use on Chinese networks after the company promised never to allow other governments secret “backdoor” access to users’ data. In Germany, the consumer privacy regulator of the major city of Hamburg told Google it must obtain Germans’ permission before using information about them to create profiles for email and other services.

Park’s government has been sensitive about the Web and social media after it came under criticism following a ferry sinking in April that killed 300 people, most of them high school students.

Yong Hye-in, a 24-year-old college student, complained her friends were targeted for unjustified data collection after she was detained during a protest in May demanding government action over the ferry disaster. She received a notice that her house and her Kakao Talk account had been searched with a court’s approval.